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Abu Dhabi, UAEWednesday 12 December 2018

Tesla stock falls as fresh furore hits Elon Musk

Senior executive quits after the carmaker’s CEO is seen appearing to smoke marijuana on video

Shares fell in Tesla after CEO Elon Musk was pictured on YouTube apparently smoking a joint. AP 
Shares fell in Tesla after CEO Elon Musk was pictured on YouTube apparently smoking a joint. AP 

Shares of electric car maker Tesla Inc. fell more than 6 percent early on Friday after CEO Elon Musk appeared to smoke marijuana during an interview and the company's accounting chief left after a month on the job.

Mr Musk appeared on "The Joe Rogan Experience" overnight and about two hours into the podcast, which can be seen on YouTube, Musk inhales from what the host says is a combined marijuana-tobacco joint, which Mr Rogan notes is legal.

Later Mr Musk says he doesn't notice any effect from the joint, which he claims he rarely smokes.

The interview was followed by an announcement by the company that its chief accounting officer Dave Morton had resigned after a month, citing public attention and the fast pace of the post.

"Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations," the company quoted Mr Morton as saying in the filing with the US Securities and Exchange Commission.

"As a result, this caused me to reconsider my future. I want to be clear that I believe strongly in Tesla, its mission, and its future prospects, and I have no disagreements with Tesla's leadership or its financial reporting," he was quoted as saying.

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Tesla is under extreme pressure to turn a sustained net profit starting this quarter, as promised by Musk. But in the second quarter it burned through $739.5 million in cash and lost a quarterly record $717.5 million.

Mr Musk has said the company is producing more than 5,000 Model 3 electric cars per week, and cash generated from the sales will bring sustained quarterly profits. The Model 3 starts at $35,000, although the cheapest one that can be purchased at present costs $49,000.

Moody's Investor Service downgraded Tesla's debt into junk territory back in March, warning that Tesla won't have cash to cover $3.7 billion for normal operations, capital expenses and debt that comes due early next year. Tesla said cash from Model 3 sales will pay the bills and drive profits.

The company said its accounting functions will be overseen by the chief financial officer and corporate controller. Morton's resignation is effective immediately.